ASCs Take on Lap-Band Surgery, But Payors Still Have to Catch up

Laparoscopic gastric band surgery, buoyed by an obesity epidemic and improved clinical outcomes, has become a viable option for ambulatory surgery centers, but payors have been slow in extending coverage to surgery centers.


In San Diego, a hotbed of lap-band surgery in outpatient centers, ASCs operated by Surgery One still have to rely on cash-paying patients. Payors only cover lap-band patients in the hospital, says Scott Leggett, CEO of Surgery One. "Centers such as our own have gained substantial experience and great outcomes with cash-paying lap-band patients, but many payors still have not caught up," he says. "It is rare to find any payor that will cover lap-bands in surgery centers right now." Basically the same situation exists in other parts of the country, Mr. Leggett and others say.


There are reasons why payors have been leaving ASCs out in the cold. Traditionally, bariatric surgery could only be done in the hospital, but innovations like laparoscopic surgery, used in lap-bands, have made outpatient bariatric surgery possible. Lap-band surgery involves non-invasively placing an inflatable silicone device around the top portion of the stomach. This surgery is also a less costly option. Gastric bypass, which still can only be done in a hospital, costs about $23,000-$25,000 per case, while lap-band costs about $14,000-$15,000.


In addition to lower prices, improved complication rates have made lap-bands an important option, says Julie Ellner, MD, a bariatric surgeon who performs lap-bands at both Alvarado Hospital in San Diego and at Physician's Surgery Center at Alvarado, a joint venture with the hospital. "The surgery center is really the ideal venue for the low-risk band patient," Dr. Ellner says. "It's better from the patients' standpoint because it is a more streamlined, more personal experience. And for patients paying cash, it's a less expensive option."

Future growth opportunities

Since lap-band surgery in the ASC has to be paid out-of-pocket, centers offering the procedure took a beating in the economic downturn, but volume has been slowly recovering, Mr. Leggett says. While the number of lap-band cases at Surgery One fell when the recession started, volume has been inching back up lately, he says.


One key factor in recent growth was the FDA's decision in February to lower the patient body mass requirement for lap-band surgery. The decision has expanded the potential market of weight-loss surgery patients by 11 million people, says Goran Dragolovic, a senior vice president for Surgical Care Affiliates.


"The FDA decision bodes particularly well for ASCs, because candidates with a lower BMI are better suited for an outpatient setting," Mr. Dragolovic says. Specifically, the FDA reduced the body mass limit required for lap-band eligibility from at least 40 BMI to 30 BMI, provided that diets and weight-loss drugs were not successful and patients do not have an obesity-related condition such as diabetes or high blood pressure. "As the obesity epidemic continues, the demand for bariatric procedures, including lap-bands, will continue to grow," Mr. Dragolovic says.

ASCs still have to win over insurers

Few payors, however, have yet to cover lap-bands in surgery centers. Reacting to the possibility of complications from bariatric surgery, they typically require that the hosting facility be designated as a bariatric center of excellence. Basically, this involves meeting minimum volume levels, using appropriate equipment and following patients both before and after surgery. Mr. Dragolovic says the requirement addresses payor anxiety about expensive complications after surgery. "Treating lap-band complications can have a price tag that can be 15 times greater than the original cost of the procedure," he says.


Centers of excellence are designated either by the American Society of Metabolic and Bariatric Surgery or the American College of Surgeons. On its website, the ASMBS said it has designated more than 450 facilities nationwide as centers of excellence. To qualify, facilities must host at least 125 bariatric surgeries per year and establish procedures for care of patients. Each surgeon must have performed at least 125 bariatric surgeries and at least 50 per year, and the facility must have a dedicated multi-disciplinary bariatric team, including surgeons, nurses and medical consultants, report long-term outcomes and submit to an on-site inspection.


Several ASCs have reportedly been designated centers of excellence but have not been recognized by insurers yet. Insurers can be very choosy even about the hospital sites they'll allow, says Robert Zasa, managing partner of ASD Management, which is a partner in Physicians Surgery Center at Alvarado. "The payors don't want too many people undergoing bariatric surgery," he says. "They're trying to pick the place for this to be done that gives the best price and quality results."


As demand for bariatric procedures increases, Dr. Ellner says some payors are tightening qualification standards for patients. "We're seeing a pushback from a great number of insurers that, just plain and simple, want to avoid paying for this type of surgery, no matter where the patient has it done," she says. "Insurers are pushing patients toward the cash payment route." Dr. Ellner reports some insurers are starting to require six months to two years of monthly visits to their physician before they will consider covering a bariatric procedure. She says Premera Blue Cross in California will initiate this kind of policy on Jan. 1, 2012.

Looking for new ways to gain payor coverage

Despite payor push-back, California ASCs are looking for new opportunities for coverage of lap-band procedures in surgery centers. Mr. Leggett says the California Ambulatory Surgery Association has been in discussions with several major payors in California on extending coverage to qualifying ASCs. "CASA has been working hard to convince payors to extend coverage beyond hospitals," he says. "It has been a lengthy process, and some key insurers still are not showing any movement." Still, he says there have been encouraging signs from WellPoint and UnitedHealthcare, and Blue Shield of California has started allowing several California ASCs to apply for lap-band coverage.


Even when payors allow applications, Mr. Leggett says it could take months before an ASC could receive lap-band coverage. "There would have to be a call for applications, and then applications have to be reviewed," he says. And, of course, applications would be limited to centers that have met the ASMBS or ACS designation, which includes sufficient volume of procedures, a difficult hurdle for many ASCs.


Meanwhile, centers affiliated with hospital centers of excellence are asking to share the hospital's designation. Mr. Zasa says ASD Management is asking payors to recognize Physicians Surgery Center at Alvarado as a center of excellence through its relationship with Alvarado Hospital. "At this point, payors have not recognized that the center should come under the hospital center of excellence Mr. Zasa says. "ASD Management is processing that now with multiple payors in the San Diego area."


Dr. Ellner says sharing the designation with an affiliated hospital makes clinical sense. The Alvarado ASC is right across the parking lot from the hospital, and Dr. Ellner and other bariatric surgeons at the ASC already work in the hospital center of excellence. She says with the hospital as a partner, the surgery center can share expensive equipment, such as a bariatric laparoscope and monitors and longer cameras to use in the abdomen of obese patients. She adds that the Surgical Review Corp., which administers the ASBMS centers of excellence program, said an ASC should qualify for inclusion under the hospital's designation if the hospital is an owner and is less than one mile away from the center.


"There is a great deal of demand for bariatric surgery," says Mr. Zasa, who underwent Roux-en Y gastric bypass several years ago and has lost a great deal of weight. As a patient, he says he can understand the need for high standards and appropriate follow-up. "The surgery is a tool, not the solution," he says. "It changes your body drastically. You have to maintain your diet and regimen of exercise."

Steps an ASC should take to prepare for lap-bands

Mr. Dragolovic recommends surgery centers take the following steps before introducing lap-band surgery.


  • Select excellent clinical staff. Pick experienced surgeons whose historical complication rates meet national standards. Make sure that the anesthesiologist is experienced with intubating obese patients and choose nurses who have experience with this patient population.

  • Choose the right patients. Set up a selection protocol for patients to identity appropriate choices for the ASC setting. For example, obese patients with serious comorbidities are not good candidates for outpatient surgery.


  • Ensure appropriate post-op follow-up. The surgeon should follow the patient postoperatively for at least one year, regularly following the patient's progress. The patient should participate in support groups and follow a diet. "ASCs generally see little of this activity, but lack of these steps will adversely impact the long-term success of the procedure and may affect the reputation of the ASC," Mr. Dragolovic says.



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